Owe my (soon to be) Ex Employer Money

ACG

emmajones1976 said:

ACG said:

£250 a month will take you 2 years to clear.
If I owned the business you were leaving I would take it to court.  

I am all for being nice and I would be open to some discussion as not everyone has £6k on hand, but I would not be accepting a payment plan over 2 years.

On the flip side, you cant get blood out of a stone either.

Fair point. 
A lot can happen in 2 years, loss of job, sickness, redundancy etc etc. Why would I as a business owner want that liability? 

The court paperwork landing on the door mat might focus his attention on finding a way to pay the bill. It might not, but the only way to find out would be to file it with the courts. 

If there truly is no money and no way of getting it, the business has lost £70. But if there is, they have got what they wanted and may also be able to add on the court costs and interest at 8%... Whether or not they can do that I am unsure. 

I would not be against finding a way, but I would not not want to carry the debt over 2 accounting periods. 

Duggz0r

MattMattMattUK said:

emmajones1976 said:

ACG said:

£250 a month will take you 2 years to clear.
If I owned the business you were leaving I would take it to court.  

I am all for being nice and I would be open to some discussion as not everyone has £6k on hand, but I would not be accepting a payment plan over 2 years.

On the flip side, you cant get blood out of a stone either.

You can't, but you can get a CCJ out of a court, followed by an enforcement notice, then an attachment to earnings.

OP, you say that the new job is absolutely worth it, but that this is going to cost you £6,000, how much extra per year does this new job pay and will be the annual pay?

The new jobs 4k p/a more than my current. And it is certainly worth it in the long run, I'm having to look at this as an investment in myself which will net me far greater than anything the current role will. In addition to the mental health side of things.

warby68

How long does the car deal have to go before there are no penalties ?

Presumably you can't take the car over from your employer ?

Are there no creative possibiities where you sell the car to a dealership and they settle the finance or are you well behind on equity. 2nd hand car values are in general favourable to sellers at the moment.

As the ex-employer I wouldn't have a lot of goodwill here - 2 years might be what it takes but I'd probably try harder to shorten it.

It must be a good job as £6k is hefty cost to be prepared to take a hit on. Have you explored what these costs are and if they are fair and accurate and not being vaguely waved around as some kind of handcuffs?

MattMattMattUK

Duggz0r said:

MattMattMattUK said:

emmajones1976 said:

ACG said:

£250 a month will take you 2 years to clear.
If I owned the business you were leaving I would take it to court.  

I am all for being nice and I would be open to some discussion as not everyone has £6k on hand, but I would not be accepting a payment plan over 2 years.

On the flip side, you cant get blood out of a stone either.

You can't, but you can get a CCJ out of a court, followed by an enforcement notice, then an attachment to earnings.

OP, you say that the new job is absolutely worth it, but that this is going to cost you £6,000, how much extra per year does this new job pay and will be the annual pay?

The new jobs 4k p/a more than my current. 

In the sort term then it will take you 18 months to get that cost back, so not a huge issue, but certainly far from ideal. Keep in mind that your contract may allow them to deduct your entire final pay cheque from the amount owed so I would really say it is worth finding a compromise you can both work with.

Duggz0r said:
And it is certainly worth it in the long run, I'm having to look at this as an investment in myself which will net me far greater than anything the current role will. In addition to the mental health side of things.

That is a good way to look at it, but you also need to manage the short term as well. When you said you have exhausted the options, I presume you have applied for a loan and been turned down? Have no savings? You also said you have offered £250 pcm, how realistic is that in terms of your personal finances? As an example if you only have £350 pcm left per month after paying all mortgage/rent, bills, food etc. then a magistrate might see that as entirely reasonable to make a monthly repayment of £250 pcm (but may still grant a CCJ), if you are giving yourself £500+  pcm spending money whilst only repaying £250 pcm the magistrate would probably take a dim view of that. If you were to take the option of getting rid of this liability as quickly as you could, how quickly could you pay it off?

ACG

If you are on £4k more, assuming you are in the 20% tax bracket, that will put you around £250 a month better off. 
Presumably there is also no monthly repayments on the car. So I assume you can pay the £250 + whatever you were paying for a car? Then unless you were living pay cheque to pay cheque, there may be some spare money each month? 

I could be wrong, but it sounds like the £250 per month is an amount you are "happy paying" rather than an amount you "can" pay. Basically, it sounds like there is room to pay more. 

Jude57

emmajones1976 said:

Jude57 said:

Also, be aware that the former employer, once they have obtained a County Court Judgment, have a range of recovery options available to them, including Attachment of Earnings. The amount deducted would take account of reasonable living expenses but not any other debts (excepting priority debts like Income Tax, Council Tax, VAT). The Court can enforce the debt in a number of other ways but AofE would be my bet, as it's a guaranteed payment. New employer can't fail to comply but only OP can know how it might affect the new job.

By the time it gets in front of a judge, assuming it got that far, he would have had the thick end of the debt paid off @ £250 a month and surely no authority is going to authorise an AoE on a debt lower than £3k when he is paying £250 a month WILLINGLY off it.

I agree it's unlikely to be a quick process but I've seen AoE's authorised on debts well below £3k so the OP needs to be aware. I've also seen Bankruptcy petitions from creditors for £3k+/- simply to satisfy their shareholders that they did everything they could before writing a debt off. Again, unlikely but it does happen. In a 30 year career, the number of times I've had to caution against the view that 'no Court/Judge is going to.....' must be into six figures. Without knowing all the circumstances, it's impossible to be even confident that a Court/Judge will rule a particular way. Even then, lawyers will never say a case is won until it's actually won.

In this case, OP says they can afford £250 per month. Perhaps that's 'can afford if no changes are made to lifestyle to free up more cash' or it could mean 'having set out my priority living costs and reduced spending in every possible area, e.g. by cutting everything back to the minimum, even if it's hard for the next couple of years, but I can clear this debt faster that way'. Or anywhere in between. A Court, and indeed the former employer, are likely to take a dim view of someone spending £80 a month on the latest phone, £120 a month on Sky etc and £500 a month on clothes, entertainment and eating out. There's no need to live on value baked beans but it's rare to see a budget (my own included) that couldn't be trimmed. There's lots of support and tips on how to do this on the Debt Free boards here.

@DuggzOr I'm sure you've already thought of selling anything you don't need to raise a bit of cash? Or possibly getting a second job? Or getting a lodger? Even an extra £100 a month would reduce the timescale to clear this debt. It might be best for you to grit your teeth and 'suffer' in the short term to get this headache sorted. 

TELLIT01

Personal loan from the bank over 2 years, pay the employer and then pay the bank back. The increased pay at the new employer virtually covers the entire cost apart from interest.   Interest rates are very low currently and the threat of court action is removed.  It seems the obvious route.

kazwookie

Contact the lease company direct and ask if you can buy it off them, and check if the £6k is correct or is it your employer pulling a fast one ?

penners324

Have you asked for evidence of this £6k debt? Seems very high. What car scheme is it?

Sandtree

You say you've tried everywhere to get the money? Have you tried the ClearScore app? 

A friend with very poor credit due to an extended period of unemployment, even turned down by some payday lender types, did look and there was a "guaranteed acceptance" from a couple of outfits she never heard of at much lower rates than she thought. 

Not recommending them, dont know them from Adam (the lenders, ClearScore is well known and promoted here) but if you really want another solution it may be worth looking.

For a £6k early fee it feels like the car was either nearly new to you (in which case bad timing to get a car if you are thinking of leaving) or you are a higher rate tax payer in which case the £4k net of tax is going to take a fair while to repay the £6k